East Africa’s positive growth experienced in 2022 was replicated in 2023, owing to the private equity (PE) and venture capital investments and exits, which led the way in deal activity last year. In 2022, after East Africa had made tremendous progress in recovering from the COVID-19 epidemic, the growth started to thread upward. Then region saw at-least 114 deals being struck during the time of review.
According to the advisory firm I&M Burbidge Capital PE investments and exits had reached 37 deals, by October 2023, while VC had shot up to 33 deals, as relayed by The East African.
The report also notes that by the end of October 114 deals had been recorded across East Africa with 81 of those being signed in Kenya.
2020 and 2021 saw a significant decline in deal activity as a result of the global pandemic. However, it began to pick up in 2022, and in 2023, maintained its momentum.
“It looks likely that the number of deals will have been roughly similar in 2023 to 2022, but the value of deals has increased a great deal. Given that 2022 was a big increase over 2021, this means it was a fairly positive year,” I&M Burbidge Capital CEO Edward Burbidge said.
“It is likely there will be more PE exits once again. Although the macro picture is challenging, which we expect to weigh a little on mergers and acquisitions, the demographic imperative of being in Africa for global companies should outweigh this and lead to an increase in M&A once again in 2024,” the CEO added.
The CEO added that additional climate finance agreements as well as a modest rise in public capital markets agreements are to be expected.
Considering the substantial financial resources, investments made by Development Finance Institutions have resulted in the greatest individual agreements in terms of ticket sizes.
“Notable DFI deals during the year were the International Finance Corporation loan transaction with Seacom, worth $207 million, and a $72 million loan by African Development Bank, Finnfund, and the Eastern and Southern African Trade & Development Bank (TDB) to energy form Globelec for the construction of a geothermal power plant,” the East African report reads.
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